Square Plans to Build Open-Source Bitcoin Mining System

Financial services provider, Square, is planning to build an open-source Bitcoin mining system and has begun investigating the technical requirements. This is according to CEO Jack Dorsey who shared a series of tweets explaining that he plans to follow a collaborative approach.

To Dorsey, further decentralization of the Bitcoin network will be critical for securely settling the transactions “well after the last bitcoin is mined.” The development comes as Square’s system aims to deliver energy-efficient mining solutions by innovation in silicon, software, and integration.

Square is considering building a Bitcoin mining system based on custom silicon and open source for individuals and businesses worldwide. If we do this, we’d follow our hardware wallet model: build in the open in collaboration with the community. First some thoughts and questions.

— jack (@jack) October 15, 2021

This project will be headed by Jesse Dorogusker, Square’s hardware lead, who is reported to have previously helped launch Square’s hardware wallet and custody service. Dorsey further hinted that the company will build the mining system following a similar collaborative approach that was used to develop its “assisted custody” BTC hardware wallet.

Through various business initiatives, Dorsey has always supported the Bitcoin community. Recently, he rolled out a crypto-based tipping service on Twitter, allowing users of the microblogging platform to link third-party apps such as Cash App and Venmo to receive funds from other members of the platform.

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Proto is more than a mining rig

Proto is being developed as an open Bitcoin mining system, meaning parts of the hardware and software stack can be developed, inspected and modified by the wider Bitcoin ecosystem. Block has positioned this openness as a way to give miners more flexibility over the equipment they use.

In its shareholder letter, Block said it expected to deliver its first mining chips in 2025 while continuing to invest in next-generation chip design and mining systems.

The company has since continued to list Proto as one of the core components of its Bitcoin ecosystem in regulatory filings, alongside Bitkey and its open-source Bitcoin work through Spiral.

Block wants to change how Bitcoin mining hardware is built

Bitcoin mining has become increasingly concentrated among companies capable of accessing specialized hardware, cheap electricity and large-scale infrastructure.

The economics are particularly challenging for smaller operators because modern mining requires highly efficient application-specific integrated circuits (ASICs), significant electricity and sophisticated cooling and infrastructure.

Block’s argument is that more open hardware could lower some of the barriers created by today’s vertically integrated mining equipment market.

Instead of forcing miners to rely entirely on a single manufacturer, an open system could allow developers and manufacturers to build compatible components and improve the technology independently.